Dealmaker: Love Funding Closes $31M for Multifamily, Nursing Properties
Love Funding, Washington, D.C., closed $31.1 million for multifamily and nursing properties in Tennessee and Missouri.
In Memphis, Tenn., Love Funding Senior Director Tammy Tate secured $18.25 million for Chickasaw Place Apartments.
Tate secured the loan through HUD’s 223(f) loan insurance program, which provided the development team long-term non-recourse financing to purchase the property and to fund updates to the entire community. In addition to the HUD financing, the project will utilize 4 percent Low-Income Housing Tax Credits with tax-exempt bonds allocated by the Tennessee Housing Development Agency and tax-exempt bonds issued by the Health, Educational and Housing Facility Board of Memphis. The renovation will approach $34,800 per unit, or nearly $10 million.
Chickasaw Place Apartments currently has 272 units in 25 two- and three-story buildings. Two units will be converted to non-revenue units used for a community room and fitness room so post-renovation the property will total 270 revenue-producing apartments. All rental units are covered under a 20-year project-based Section 8 Housing Assistance Payments contract.
Love Funding also closed a $12.9 million FHA loan to take out bridge financing used to refinance The Woodlands of Arnold, an assisted living, memory care and skilled nursing complex in Arnold, Mo.
Love Funding Senior Director Eric Forguson obtained the bridge loan from Love Funding parent company Midland States Bank, then converted it to the permanent HUD loan structure. The new loan through HUD’s Section 232/223(f) program refinanced the bridge loan and provided non-recourse financing for a 35-year term.
The short-term bridge loan was a mechanism to complete a cash-out refinance: Midland funded the bridge transaction for the borrower, then Love Funding immediately applied to HUD for the permanent mortgage. HUD did not require debt seasoning because the LTV was below 70 percent, more than half the bridge loan proceeds were used for project purposes and the property had exhibited stabilized cash flow for three years.
The Woodlands of Arnold is part of a larger healthcare campus that offers care including independent living, assisted living, memory care and skilled nursing. The subject credit facility included financing for a 178-bed skilled nursing facility and a 24-unit assisted living facility that is converting to a memory care facility.
